Page 87 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

results in fragmentation of payment services and/or of payment service providers, which leads to their limited
or null interoperability.

In addition, being able to make effective use of key payment infrastructures is an important element underlying
a competitive payments market. Payment systems generally benefit largely from economies of scale and
network effects, and for this reason in any particular market there is a very small number of payment systems.
Hence, not being able to participate in a key payments infrastructure may significantly affect the competitive
balance among market participants.

From a financial inclusion perspective, in their 2016 report "Payment Aspects of Financial Inclusion" the
Committee on Payments and Market Infrastructures (CPMI) and the World Bank Group have described the
issue at stake as follows:

"Restricted access to financial and ICT infrastructures, especially of new or non-traditional service providers,
tends to constrain the supply of payment services to users. Often incumbents with a dominant position in one
infrastructure have the incentive to create barriers for access to new entrants. However, there are some more
fundamental challenges to accessing the messaging, clearing and settlement service infrastructures, including
those associated with technical, legal/regulatory and/or financial viability issues (i.e., direct access might be
too expensive)."
The main purpose of this report is therefore to discuss access-to-payment-infrastructures issues around the
world, and how these can affect the development of safe, efficient, interoperable and financially inclusive
payment services.
This document builds on the collective experience of the members of the Interoperability Working Group and
the broader Focus Group on Digital Financial Services, convened by the International Telecommunication
Union (ITU).

The document is organized as follows: the first section provides a general description of the historical role of
banks in the payments business, and highlights the increasing role of non-banks in this area in recent years;
the second section describes the core interbank payment infrastructures that are observed in most markets
around the world, namely real-time gross settlement systems, automated clearinghouses and payment card
switches, emphasizing the important role that these infrastructures play in making PSPs interoperable at
different levels; section IV discusses legal and regulatory aspects related to access to payment infrastructures,
in particular the various types of access criteria that are typically included in the rules or regulations of those
systems; Section V then presents and analyzes global data on access-to-payment infrastructures issues. The
main body of the report ends with a section that discussed key insights and conclusions. A number of specific
case studies are then presented in Annex I.

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